Wed, May 6, 12:34 PM
- Less than 2 months after launching cloud-based analytics services for mining Twitter data, IBM (IBM -1.9%) is partnering with Facebook (FB +1.1%) to deliver improved marketing/targeting tools for Facebook ad clients.
- IBM, which has made several marketing software acquisitions over the last few years, will provide analytics and cloud-based marketing apps that give clients deeper insights into users being shown ads via Facebook targeting tools such as Custom Audiences (enables targeting based on both Facebook and non-Facebook activity), and help them design and run personalized ad campaigns covering Facebook and other channels.
- IBM: "[A] retailer launching a new line of running gear can use Facebook's Custom Audiences and targeting solutions to segment its customer groups that are interested in long-distance running. The retailer can then glean aggregated insights into the audience's preferences in running gear and, based on location, offer deals on apparel that fit the appropriate training climate."
- Separately, Oculus has announced a commercial version of the Oculus Rift VR headset will launch in Q1 2016, with pre-orders starting later in 2015. The Facebook unit states the commercial model will improve upon Oculus' 2014 Crescent Bay prototype through "an improved tracking system that supports both seated and standing experiences, as well as a highly refined industrial design, and updated ergonomics for a more natural fit."
- Details about hardware, software, input, and game support will be given shortly. Samsung plans to launch a consumer-focused version of its Oculus-based Gear VR headset (relies on a phone's display and camera, currently aimed at developers and early adopters) by year's end. Oculus is widely seen as having an early tech lead over VR rivals such as Sony and HTC.
Wed, May 6, 12:51 AM
- Intel's (NASDAQ:INTC) new Xeon E7 v3 server CPU line follows the Sep. 2014 launch of the company's Xeon E5 v3 (Grantley) line. Whereas Grantley is aimed at smaller servers (1-4 CPUs) going into distributed HPC systems or hyperscale Web/cloud data centers, the E7 v3 line is aimed at high-end/mission-critical servers running up to 32 CPUs.
- Like Grantley, E7 CPUs are made using Intel's 22nm Haswell architecture and support up to 18 cores (the prior-gen E7 v2 supports up to 15) able to run two threads at a time. With an eye towards catering to memory-intensive analytics and in-memory database workloads (a rapidly growing market segment), the chips support up to 45MB of Level 3 cache and up to 1.5TB of DRAM per CPU socket (Intel claims this is an industry high).
- 17 OEMs, including HP, Dell, Cisco, Lenovo, and Oracle, plan to launch E7 v3 servers. Intel is counting on the CPUs to take further high-end share from RISC CPU lines such as Oracle's SPARC and IBM's Power. IBM is trying to drive a rebound in Power sales by licensing the platform to 3rd-party OEMs and CPU developers; its massive Power8 CPUs support up to 12 cores and 8 threads/core.
- Analyst Patrick Moorhead argues Intel is "closing the gap" with RISC vendors on the high-end with its latest offerings. "If you want the absolutely highest performance on SAP, you would look to IBM, but it comes with some caveats. The big difference comes in performance per dollar, where Intel-based systems from HP, Dell, or Lenovo could perform better by 5-10x versus an IBM Power-based system."
Sat, May 2, 4:24 PM
- "I make no apologies whatsoever for Clayton's lending practices," says Warren Buffett, responding to a Berkshire Hathaway (BRK.A, BRK.B) shareholder who says he's disgusted Berkshire would support Clayton Homes' allegedly predatory lending practices. "Clayton," says Buffett, "has behaved very well."
- Previously: Berkshire mobile homes unit accused of predatory tactics (April 6)
- Only about 3% of Clayton's $12B in mortgages on 300K homes fail, says Buffett, noting Clayton does not securitize the paper, but instead holds the notes on its books.
- The Oracle also defended his partnership with 3G - an outfit which has won a well-deserved reputation for ruthless cost-cutting, seemingly at odds with Buffett's distaste for layoffs and other expense reductions.
- See: Zero-Based Budgeting, 3G's secret sauce
- Buffett: “I don’t know of any company that says, as a policy, ‘we will have more people than we need,’ but a lot of companies ended up that way." Layoffs at 3G-run companies have spurred those companies to perform "exceedingly well."
- On American Express (NYSE:AXP): While the payments industry is subject to innovation, AmEx has an incredible history of adapting.
- On IBM: Asked if this is a "cigar butt" company - a great old company on the slide, but still a couple of puffs left (like Berkshire Hathaway when Buffett bought) - Charlie Munger says it isn't. He reminds that IBM was the dominant player in punch cards and has adapted over the years. It helps, says Munger, that Berkshire bought its stake at a reasonable price. "If people weren't often so wrong, we wouldn't be so rich."
- Live blog of the meeting at the WSJ
Tue, Apr. 28, 10:31 AM
Tue, Apr. 21, 4:20 AM
- 1. Flat is the new up: "Revenue numbers dropped for the 12th consecutive quarter and the company managed to miss estimates this quarter too. But CEO Ginni Rometty noted that if you exclude results from foreign currency exchange as well as businesses that IBM will be divesting itself of overall revenue growth was flat."
- 2. Cloud computing results were mostly positive: "The cloud business was generating revenue at an annualized rate of $3.8 billion, up from $2.3 billion a year ago. It’s a move in the right direction but for a company that generates around $90 billion a year in revenue the cloud services business isn’t moving the needle just yet."
- 3. IBM is a slow ship to turn: "Rometty is in her fourth year as CEO and while she has doing some things to spread out and revive IBM’s revenue streams the results have been slow in coming."
- Source: Dave Dierking
- Previously: International Business Machines beats by $0.09, misses on revenue (Apr. 20)
- Related: International Business Machines' (NYSE:IBM) Q1 2015 Results - Earnings Call Transcript (Apr. 20)
- Related: IBM Stock And The Case For Exceptional Patience (Apr. 20)
Mon, Apr. 20, 4:33 PM
- With a Q1 EPS beat in tow, IBM is reiterating full-year EPS guidance of $15.75-$16.50 (compares with a $15.89 consensus). Big Blue also still expects free cash flow to be flat relative to a 2014 level of $12.4B.
- Forex had an 8% impact on Y/Y revenue growth, up from Q4's 4.4%. Divestments had a 4% impact.
- Helping EPS beat estimates in spite of a revenue miss: 1) Gross margin rose 80 bps Y/Y to 49.3%. 2) Non-GAAP SG&A spend fell 18% Y/Y to $5B, and R&D spend fell 9% to $1.3B (forex and divestments played a role). 3) $1.2B was spent on buybacks.
- Segment performance: Global tech services revenue -11% Y/Y to $7.9B; op. profit of $994M. Global business services -13% to $4.3B; op. profit of $597M. Software -8% to $5.2B; op profit of $1.94B. Hardware -23% to $1.7B; op. profit of $24M. Financing -10% to $0.5B; op. profit of $515M.
- Geographic performance: Americas revenue -3% to $9.3B (+2% adjusted for forex and asset sales). EMEA -19% to $6.1B (-2% adjusted). Asia-Pac -18% to $4.1B (-2% adjusted).
- The services backlog fell by $17B Y/Y to $121B; IBM says it's flat on an adjusted basis. Hardware revenue was up 30% adjusted for forex and the x86 server division sale, thanks to a 118% increase System z mainframe revenue (upgrade cycle). Power systems revenue fell 3%, a smaller drop than in recent quarters; storage revenue fell 8%. Within software, middleware fell 5%.
- Free cash flow was $1.1B, trailing net income of $2.9B. "Cloud delivered as a service" revenue is now on a $3.8B/year run rate, up $500M Q/Q. Analytics revenue rose 12% Y/Y.
- IBM -0.4% AH to $165.50. Shares rose 3.4% in regular trading ahead of the report, aided by a market rally and possibly an upbeat Barron's column.
- Q1 results, PR,
Mon, Apr. 20, 4:06 PM
Mon, Apr. 20, 11:30 AM
- IBM is posting solid gains ahead of this afternoon's Q1 report. 2M shares have been traded thus far vs. a 3-month daily average of 4.6M. The S&P is up 1%, and the Nasdaq 1.2%.
- A positive weekend column from Barron's' Vito Racanelli might be helping Big Blue's cause. Racanelli: "Expectations and sentiment for the Armonk, N.Y.-based tech giant seem so low now that it’s time to take a second look ... Like a supertanker, IBM takes a while to change direction but there’s identifiable change coming."
- He takes issue with the image of IBM as a tech dinosaur that has missed out on the cloud services boom, and observes its cloud revenue grew 60% in 2014 to $7B. Worth noting: IBM's definition of "cloud revenue" also covers ancillary products/services. Its "cloud delivered as a service" revenue totaled $3B in 2014, and was on a $3.5B/year run rate at year's end.
- Racanelli also highlights IBM's 2.7% dividend yield, low multiples, investments in other growth markets, and passes on upbeat remarks from two fund managers, one of whom sees the company benefiting from a server upgrade cycle - the System z mainframe line was recently refreshed.
- Last week, Credit Suisse (a long-time bear) forecast a slight Q1 miss thanks to forex pressures, and also voiced concerns about order/deal softness, internal turmoil/underinvestment, and the margin impact of a shift towards cloud revenue streams.
- IBM is up 6% since providing mixed Q4 results and light 2015 guidance on Jan. 20.
Sun, Apr. 19, 5:35 PM
Mon, Apr. 13, 6:29 PM
- Looking to grab a bigger chunk of a burgeoning healthcare analytics market by offering more industry-specific solutions, IBM is buying Phytel, a provider of cloud-based patient data aggregation/analysis software, and Explorys, provider of a massive clinical database (said to consist of 315B datapoints) and a slew of analytics apps that run on top of them. Terms are undisclosed.
- IBM declares Phytel will help it give healthcare providers "insights into patient health from data about patient behaviors and their engagement with care plans," and that Explorys will "accelerate the delivery of IBM Health Cloud and IBM Watson cognitive solutions to model and apply medical evidence and large scale analytics to data."
- Both companies are being added to a new Watson Health unit based out of Boston. The business aims to provide software/services that can surface insights from large volumes of anonymous personal health data. As part of the effort, Big Blue is launching Watson Health Cloud, a platform that allows this data to be "anonymized, shared and combined with a dynamic and constantly-growing aggregated view of clinical, research and social health data."
- IBM's partnership with Apple (NASDAQ:AAPL) has been expanded to cover Apple's HealthKit (health/fitness data) and ResearchKit (medical research) frameworks, via Watson and Health Cloud. The latter will provide a data storage/aggregation platform for iOS apps using HealthKit and ResearchKit. In addition, IBM will "build a suite of enterprise wellness apps using HealthKit."
- Also: 1) IBM is partnering with Medtronic (NYSE:MDT) to create diabetes management solutions that pair Medtronic's devices (and the data they produce) with IBM's analytics and cognitive computing tools. 2) IBM is partnering with Johnson & Johnson (NYSE:JNJ) to "create intelligent coaching systems centered on preoperative and postoperative patient care, including joint replacement and spinal surgery."
Sat, Apr. 11, 7:04 PM
- Following an NYT column featuring remarks from exec Bill Hilf that that were taken to suggest HP (NYSE:HPQ) is exiting the public cloud infrastructure (IaaS) market, HP has told CRN it remains committed to the space. However, the IT giant adds (echoing Hilf's remarks) it's "not competing head-to-head with the big public cloud players," such as Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOG), and Microsoft (NASDAQ:MSFT).
- HP's comments follow the February departure of top cloud exec Marten Mickos (joined via the Eucalyptus acquisition), and the splitting of his responsibilities between Hilf and two other execs. The company entered the public cloud market in 2012, and (like many other enterprise IT firms) has been a backer of the OpenStack IaaS platform (pitched as an open-source alternative to Amazon/Google/Microsoft's proprietary offerings). HP asserts it has the largest OpenStack public cloud in existence.
- HP's stance arguably highlights the challenges traditional enterprise IT names face in countering the cost and scale advantages possessed by IaaS market leaders, who have often eschewed the hardware of IT giants in favor of cheap white-label hardware produced by Asian contract manufacturers. HP has partnered with Taiwan's Foxconnn and Accton to offer white-box gear for cloud providers.
- Synergy Research estimates the broader "cloud infrastructure service" market (covers IaaS and PaaS, as well as private and hybrid clouds) grew 48% in 2014 to $16B, as more on-premise workloads get migrated to cloud environments and various cloud service providers relying on IaaS/PaaS infrastructures see rapid growth. Amazon towered over the space with a near-30% share, close to 3x that of #2 Microsoft. IBM, Google, and Salesforce (NYSE:CRM) rounded out the top 5.
Thu, Apr. 2, 4:13 PM
- Reuters reports disgruntled major IBM shareholders are "seeking help from activist investors to shake up the company." Bill Ackman's Pershing Square Capital and Jeffrey Ubben's ValueAct Capital are said to have turned them down.
- In response to the discontent, which follows an 11-quarter run of Y/Y revenue drops and the pulling of IBM's $20 2015 EPS target, Big Blue has reportedly hired two i-banks to help "formulate a defense plan."
- Among the reported concerns of activists approached by shareholders: IBM's shares are considered too expensive; the company's structural problems aren't seen as easy to fix; and CEO Ginni Rometty is believed to be "doing a good job coping with a tough situation."
- Also: IBM has already been cutting jobs, carrying out huge buyacks, and selling underperforming businesses - historically three of the most popular remedies proposed by activists - for a long time.
- Meanwhile, IBM has announced a partnership with China Telecom to offer its enterprise iOS apps (the fruits of the IBM/Apple deal) to China Telecom's clients. IBM and Apple recently released 8 more enterprise iOS apps, bringing the total to 22.
- Shares rose 0.8% today to $160.45.
- Previously: IBM hikes Rometty's compensation for 2015
- Previously: Buffett adds to IBM stake in Q4
Tue, Mar. 31, 2:00 AM
- IBM (NYSE:IBM) is investing $3B over the next four years in a new 'Internet of Things' division, aiming to sell its expertise in gathering and making sense of the surge in real-time data.
- For its first major partnership, IBM said a unit of the Weather Company will move its weather data services onto its cloud, so that customers can use the data with IBM's analytics tools.
- Focusing on the cloud has been part of Big Blue's gradual shift away from its traditional hardware and consulting business.
Mon, Mar. 23, 3:24 PM
- The Barron's 400 has regularly beaten the S&P 500 (NYSEARCA:SPY) since its 2007 launch, writes Chris Dieterich, and also powers the Barron's 400 ETF (NYSEARCA:BFOR), which has topped the S&P 500 by nearly 500 basis points since starting in June 2013. BFOR is up 6% YTD, more than double that of the S&P 500.
- Among those added to the index during last week's twice-yearly rebalancing were Celgene (NASDAQ:CELG), American Airlines (NASDAQ:AAL), Starbucks (NASDAQ:SBUX), and Ameriprise Financial (NYSE:AMP).
- Among those dropped were McDonald's (NYSE:MCD), Wells Fargo (NYSE:WFC), Verizon (NYSE:VZ), and IBM.
- A "ruthless" quantitative security-selection method screens for growth, value, and cash flow, and filters further with other factors such as diversification.
Mon, Mar. 23, 1:54 PM
- Looking to bolster Chinese sales that nosedived following the NSA scandal, IBM (IBM +1.2%) will share technology with local firms to help China develop its IT industry, CEO Ginni Rometty stated at a Chinese conference.
- 13 months ago, Rometty met with Chinese officials in an attempt to restore trust. With the help of easier comps, Big Blue's sales to the Middle Kingdom only fell 1% Y/Y in Q4, after seeing double-digit declines earlier in 2014.
- Rometty's remarks come three months after Bloomberg reported the Chinese government is "aiming to purge most foreign technology from banks, the military, state-owned enterprises and key government agencies by 2020." A February Reuters analysis found the number of approved foreign tech brands on a Chinese government buy list for state entities had fallen by a third.
Thu, Mar. 19, 10:05 AM
- With Apple Watch set to ship next month, leading high-end Swiss watchmaker Tag Heuer plans to launch a watch that runs on Google's (NASDAQ:GOOG) Android Wear platform, and is powered by an Intel (INTC +0.1%) CPU.
- The PR provides few details about the watch, but Reuters reports the product will be a version of Tag's bestselling Carrera line, and launch next autumn. With Carerra watches often priced above $2K, the deal will likely be more valuable to Intel as a reference win - the vast majority of early smartwatch launches have involved ARM-based CPUs - than as a revenue-generator.
- Intel is going after the wearables market by pitching its Atom CPUs for relatively powerful devices, and its tiny Quark CPUs for less resource-hungry products where battery life is a priority. It has also launched Curie, a button-sized module containing a Quark CPU, flash memory, Bluetooth radio, and sensor hub. The company has a partnership with eyewear giant Luxottica, and has reportedly landed a design win for the next version of Google Glass.
- Separately, IBM (IBM +0.2%) has announced the first OpenPower servers - servers running on IBM's Power CPUs (compete against Intel's Xeon line), but which can be made by 3rd-party OEMs and could sell for much less than IBM's Power-based servers historically have - will launch in Q2 and be sold by Taiwanese manufacturer Tyan. IBM plans to offer its own OpenPower servers later this year in partnership with Taiwan's Wistron; they'll be aimed at the high-performance computing (HPC) market.
- Google, Nvidia, Mellanox, and Rackspace are among the companies that have given their support to OpenPower. IBM is both hoping to halt Power's long-term share losses to Intel, and grab a bigger share of an Internet/white-box server market (dominated by Intel systems) that accounts for a large and growing portion of global server spend.
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